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What Affects MFP in the Long-Run? Evidence from Canadian Industries

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In this paper we explore variables that may have an impact on multifactor productivity (MFP) in the long-run using the KLEMS database for Canada. We estimate a dynamic heterogeneous panel error-correction model of twelve 2-digit level industries. Variables investigated include ICT capital, outsourcing, competition, trade openness, public infrastructure, and R&D. Results suggest that over the 1976 – 2003 period ICT capital services, outsourcing and trade all had a positive impact on the level of industry MFP. The speed of adjustment varies significantly by industry.

Published In:

Applied Economics (0003-6846)
March 2012. Vol. 44, Iss. 6, pp. 727-738

Topic(s): Productivity
JEL Code(s): C, C2, C23, D, D2, D24, O, O3, O30